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Gomez Corporation is considering two alternative investment proposals with the following data: Proposal X Proposal Y Investment $850,000 $468,000 Useful life 10 years 10 years

Gomez Corporation is considering two alternative investment proposals with the following data: Proposal X Proposal Y Investment $850,000 $468,000 Useful life 10 years 10 years Estimated annual net cash inflows for 8 years $125,000 $78,000 Depreciation method Straightline Straightline. What is the accounting rate of return (ARR) for Proposal Y and which Proposal would Gomez choose based on ARR?

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